The Importance of Hospital Liens

As an attorney who has exclusively represented hospitals for the last 18 years, one thing that I’ve seen that hospitals can do more of to increase their revenue is to file hospital liens in appropriate situations in states that have such laws. If you’re not familiar with such liens, simply put a hospital lien gives the hospital a legal interest or entitlement to at least a portion of any settlement or judgment proceeds due the patient from another party that caused or contributed to the patient’s injuries.

The most common scenario for a hospital lien is where the patient was injured in a car accident and another party was at fault. (This includes where the patient was a passenger and the driver of the vehicle the patient was riding in was at fault, or if the patient was a pedestrian and the vehicle who hit the patient was at fault.) However, a lien can and should be filed any other time where the patient was injured and is bringing a liability claim or lawsuit against an individual or entity that the patient believes is liable. This includes the patient making a claim for injuries on another’s property due to no fault of the patient, animal bites, etc. We have even filed liens and recovered in such varied situations as where the patient was suing an individual who shot them and where the patient was suing a company for asbestos-related injuries.

Generally, the presence of a properly filed lien means that if the patient settles his liability claim or gets a judgment against the at-fault party, the lien must be addressed before the recovered money can be fully distributed to the patient by their attorney. Without such a hospital lien being filed, the patient’s attorney can disburse the settlement/judgment funds to their client and not address the hospital’s bill out of those funds at that time. Unfortunately what generally happens when that occurs is that the patient uses their recovery for other purposes and then does not have the financial capability to adequately resolve their outstanding hospital bill. Obviously it is in the hospital’s best interests to do all they can to make sure that the patient uses their liability claim recovery to resolve their bill at that time, and a properly filed hospital lien legally requires that this happen.

Each state’s laws differ to some extent and normally the procedures and deadlines for filing a hospital lien must be followed exactly. For example some states such as Georgia and Texas require the lien to be filed with a specific court or courts, while other states such as Louisiana and California only require certified notice be sent to certain parties. Also, each state’s laws can differ on who is liable if the lien is ignored and how long a hospital has to enforce the lien should that happen. It is also important to note that some states, such as Kentucky, do not have any hospital lien laws whatsoever.

Other factors relating to hospital liens that can vary from state to state include such considerations as whether or not the lien applies to claims filed through the worker’s compensation process and whether or not the lien applies to wrongful death claims. Some states such as Tennessee even limit the percentage of the total settlement that can be recovered under a hospital lien when the patient’s settlement or judgment is insufficient to fully compensate all parties. In addition, some states such as New York and Alabama require that the treatment occur within a certain time frame in relation to the auto accident (or other injury causing event) for the lien to be able to apply to that bill.

Another important factor related to hospital liens is that in some states if an attorney requests his or her client’s bill and/or medical records, that documentation must be provided free of charge to the attorney or the lien is not valid.

Finally, I’ve referenced such liens in this article as “hospital liens” for ease of reference and because it’s the common phrase used in most states, but it is important to note that in many states such liens can be filed and enforced by other medical providers and not just hospitals.

We would recommend that you consult with an attorney specializing in these matters to ensure full protection of the hospital’s legal rights in these situations.

Mike A. Aziz, Esq. is the Senior Partner at Clark, Mascaro & Aziz, P.C. and can be reached at maziz@cma-law.com and has been practicing in this area of law since 1990. Clark, Mascaro & Aziz, P.C. represents hospitals nationwide regarding stalled or denied payments from any possible third-party source of payment, as well as recovering payment from liability claims being pursued by the patient.

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